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Four areas where improvement is possible were identified.  First, since the GPA does not equip bidders for procurement contracts to vault over trade restrictions, the creation of genuine international competition for government procurement remains crucially dependent on the liberalization of trade.  Secondly, compensation for successful challengers of procurement decisions could be related to some approximation of the profits foregone rather than the costs incurred.  This may enhance their socially desirable enforcement role.  Thirdly, while settlements between firms should not be allowed, settlements between the procurer and unsuccessful firms should at least be monitored so that the enforcement role is not circumvented.  Finally, any ex post bail-outs should be subject to judicial review if challenged by ex ante competitors.  This may be quite important in preventing the non-discriminatory provisions of the GPA from being undermined.

In its focus on relatively new issues, this paper has chosen not to address two important, but well researched, areas:  the use of offsets and competition policy.  While the Agreement forbids developed countries the use of offsets, such as domestic content or countertrade requirements, developing countries may continue to use them, provided they are negotiated during accession, clearly defined, and are applied non-discriminatorily (Article XVI).  The impact of such measures has been analyzed at length in the literature.35  The Agreement addresses competition policy issues only in so far as limited tendering is allowed when collusive tenders have been submitted (Article XV).  Implicit collusion through settlement has been discussed in this paper, while other issues have received significant attention in both the theoretical and policy-oriented literature.36  

    (See, for instance, Vousden (1990).

    (See Hoekman and Mavroidis (1995).


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